New York: MasterCard Inc has said it will accept a $90 million settlement and discontinue its sponsorship of the 2010 and 2014 World Cup, in a move that ends its legal dispute with FIFA.
MasterCard and FIFA have been fighting in court over MasterCard’s right to sponsor the World Cup. A US district judge ruled in December that FIFA did not honour its agreements with the credit card issuer when it awarded sponsorship rights to MasterCard’s rival, Visa International Inc.
In May, a federal appeals court asked the lower court judge to review her ruling due to uncertainties over whether a 2006 contract was valid.
Following the announcement on 21 June that MasterCard will end its sponsorship, FIFA said it is on the verge of agreeing to a contract with Visa. MasterCard had served as an official sponsor of the tournament since 1994.
In a conference call and interview, MasterCard’s General Counsel Noah Hanft said the appeals court was looking at a “narrow question” and that the company’s argument was supported by the court’s decision.
“At the end of the day, we felt we were in a very strong position,” he said.
Chief marketing officer Larry Flanagan said the decision to end the relationship with FIFA was based on “irreparable damage” to the company’s trust in the organisation. He said MasterCard determined the sponsorship was “basically not worth it, based on the need to have an ongoing, collaborative relationship with the other party.”